The interchange wars are over ... for now

Many people have been after me for not keeping up with my blog. When the crisis hit everything changed. Things I was writing about suddenly seemed less relevant. Today, I can see more clearly that there are still many topics that are relevant, and even more so now, while there is at least one really big thing that is much less relevant. Interchange wars.

One could imagine that some retailers might fight even harder now to reduce interchange, but I don’t believe that this will be the case. Instead, retailers are happier than ever to have a customer come in and buy something, even if they must pay interchange, which now seems like a pittance in comparison to the huge discounts that they are giving. I’ve heard recently that stores all over the UK are offering 70% discounts.

In a sense, we are going back to the original benefit of credit cards for retailers a few decades ago, where retailers were happy to pay 5% or more for facilitating a fully paid purchase. Now that credit is harder to come by, a credit card customer suddenly becomes much more valuable than a few months ago. And a premium card customer even more so, justifying the even higher interchange fees on premium cards.

I also explored this topic in an interview with MasterCard’s Shawn Miles, Group Head, Global Public Policy and Regulatory Strategy Counsel. Watch this space.

I am a very stubborn man. Those who know me will tell you so. But hey, I'll change every once in a while when something big comes along. It's my blog, right?